Guide to Incomeshield

NTUC Income has the following Incomeshield plans

Incomeshield - covers up to certain limits, less co-payment
Enhanced Incomeshield - covers "as charged", less co-payment
Medishield Plus (taken over from CPF)
PLUS rider: covers co-payment, ie deductible and co-insurance

Cover     Income   Enhanced           Medishield
Ward      shield   Incomeshield         Plus

Private   Plan P   Plan EP (Preferred)  n/a
A         Plan A   Plan EA (Advantage)  Plan MA
B1        Plan B   Plan EB (Basic)      Plan MB
B2, C     Plan C     n/a                n/a                
PLUS Rider  Yes      Yes                 No

Agents keen to join NTUC Income

At our recent recruitment briefing, 19 agents out of 20 indicate interest to join NTUC Income.

My manager called six of them after the meeting. All are positive about joining Income. Here are their feedback:

* Income is different from other insurers.
* Income has a good reputation
* Impressed with our Leads System
* The CEO is convincing
* There is potential for Career Advancement
* Easier to market Income products.
* Likes the concept of the Insuarnce consultant.

Another manager called five of them. All of them want to join Income. Here are their feedback:

Another manager called five agents who are interested to migrate to NTUC Income. Here are their reasons:

* like our Cooperative values
* Had good experience with our Claims dept
* like our 1-tier structure
* Income has strong customer base
* Income offers office-based sales job
* Career advancement

Collect the Logic9 gift from our business center

Mrs Tan participated in our Flexi-link contest at our website. She won a Logic9 pocketbook as a gift. Here is her request and my reply.

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Dear Mr Tan,

Firstly I would like to congrats your company’s innovative way of getting surveys done online. I believe that this is more effective and saves client's time.

When it comes to collection of gift token for participating, eg Logic 9 booklet, you make it very inconvenient and require us to collect it personally.

I suggest that you mail it to us. You can find our address from your database.

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Dear Mrs Tan

I hope that you don't mind coming to our business center to collect the gift. When we offered the gift, we wanted to avoid the additional cost of posting the gift.
We also wanted our consultant in the business center to have a chance to talk to our policyholder.

Tan Kin Lian
CEO, NTUC Income

Investor wants indexed fund with even lower charges

Hi Mr Tan,

Thank you for the interesting seminar on 2 Aug. Glad that your investment funds have the lowest expense ratio in the market.

When you initiate a global equity or bond index funds which will lower expense ratio by at least 50% ?

Note: Many studies have recommended index funds for long term investors.

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Dear

This may take another one or two years to be available. We have to sort out other more pressing issues first. I suggest that you invest in our actively managed fund for the time being.

Tan Kin Lian
CEO, NTUC Income

Pay by GIRO to reduce the handling cost

A policyholder is angry about having to pay a fee of 1.2% to pay through credit card. Here is his letter (edited) and my reply.

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Dear Mr Tan,

I refer to the above NTUC policy which my mother bought for me 16 years ago.

I received a letter from your office recently, reminding me of the payment via GIRO deduction.

I called your office to request to pay by credit card. I got this reply:

1. From 1 May 2006, we will allow payment for premium up to $300 by credit card. This is applicable to all products which are on yearly mode.

2. For payment in excess of $300, we will charge 1.2% to the policyholder.

3. If the policyholder does not wish to bear this charge, we will ask the policyholder to pay by GIRO, NETS, internet banking or cheque.

My questions to you are:

1. Why are you imposing a 1.2% handling fee when this is not standard industry practice?

2. Do you actually have premium policies, which are equal or less than S$300 per year? (Which is precluded from paying this handling fee?)


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Dear

Our aim is to encourage policyholders to pay by GIRO as the cost of collection is lower.

I estimate that we have to collect $500 million in life insurance premium in each year. If all the policyholders insist on paying by credit card, we have to incur 1.5% on the credit card charge. This will amount to $7.5 million.

I hope that you will realise why we are reluctant to incur this potential cost.

We have many travel, accident and home insurance policies payable by annual premium less than $300.

In your case, we have to pay a fee of $15 to the bank to receive your premium of $1,000 by credit card. We want to avoid this wasteful expense. If you send us a cheque, it will cost us $2 to process it.

We will honour claims for enhanced Incomeshield during the processing period

Mr Tan applied to convert his family existing Incomeshield plan to Enhanced Incomeshield in May.

Due to the high volume of applications and migration to a new computer system, our processing time took longer than the service standard. Hence Mr Tan was not told about the status of his conversion. He wrote to give his feedback in August.

We explained to Mr Tan of the current situation and assured him that if any claim arises within the processing time, we will honour the claim under the Enhanced Incomeshield terms. At the same time, we have requested our underwriter to expedite the processing.

Mr Tan's enhanced cover will commence on 1 September. He is happy with our assurance to honour any claim arises during the processing time, which is a fair practice.

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We will give this assurance to the 60,000 applicants that are still on our waiting list, who are in the same situation as Mr Tan, subject to the conditions below:

For policyholders requesting equivalent upgrading to the Enhanced plans, e.g. Plan B to Enhanced Basic, the higher benefits will apply.

For policyholders requesting upgrade to a higher plan, e.g. Plan B to Enhanced Advantage, the benefits under the higher plan will apply if no policy exclusion is subsequently applied. Exclusions or limited terms will only apply if the insured member has already developed a medical condition.

Past performance is not an indication of future performance

Some financial advisers recommend to their clients to invest in funds with high expense ratios that performed well in the past years.

Dr Money (a financial journalist writing for The New Paper) said that Research done in America over the past decades have shown that the top performers in past years will not be the top performers in the future years. They tend to move to the lower quartiles.

This is why MAS require a statement to be made that "Past performance is not indicative of future performance".

This is also my view, based on the experience of the funds managed by NTUC Income and our external fund managers. The performance in some years will be better than the market, and will be worse in other years.

What is the reason? Each fund manager focuses on a specific strategy, e.g. growth or value strategy. In some years, a certain strategy will perform better than the other strategy. The situation is likely to change in other years, as the investment results go in cycles.

No one knows in advance which strategy will perform better. Hence, it is better to stick to a certain strategy and measure the results over a longer period, say 10 years or longer.

If you put your money now in a high cost fund that performs better in past years, you are likely to be disillustioned. You will find that the fund will perform worse in the future years, and you will be paying high expenses for nothing.

The financial adviser will be happy to sell you the story that he is able to select a good fund for you. And he can earn a higher commision to sell the investment to you!

Here is my advice. When you choose a fund, look for a large, well diversified, low cost fund.

Do not invest in a small fund, as you have to depend on the quality of the manager. It is difficult to judge, unless you know the manager personally and can trust the manager. And when the manager moves to another fund, you do not know who will be the next person who will manage it.

Most (but not all of) the funds managed by NTUC Income earn 2% to 3% higher than similar large funds managed by other insurance companies.

I do not claim that my internal or external fund managers are performing better. It can be a matter of luck. But, I do know that our expense ratio is 1% lower than the other funds.

I also know that we manage the funds ethically and look after the interest of the existing investors. We do not churn the investments. We do not allow new investors to come in and get a better price, at the expense of existing investors. Perhaps, our ethical practices account for another 1% to 2% in the difference in yield.

A 2% difference in expense ratio will amount to 34% over 10 years. If your investment value is $100,000, you can get $34,000 more by investing in a low cost fund that gives a differnce of 2% in yield.

Here is a final tip. The combined funds managed by NTUC Income has a total of $3,800 million in assets. The actual size reported to LIA/IMAS is smaller, as it is the portion held by the ILP investors. But, they are investing in a much larger fund that is co-mingled with our life insurance fund. You can attend our educational talk by calling 68773366.

Views about expense ratio and return on funds

In his comment to my posting, a James Ong said that some funds with higher expense ratio have consistently produced better returns that NTUC Income's funds.

I asked Dr Money for his views. Here is his reply:

* As for the idea that funds with higher expense ratios have higher returns, there is no evidence of this in the literature (ie past research).

* To the contrary, index funds have lower expense ratios and on average they out-perform managed funds. The difference in performance turns out to be approximately equal to the difference in their expense ratios.

* In the long-run, costs matter in determining a fund's performance -(and the lower the costs, the better the performance

James Ong also says, "I would encourage the public to visit the LIA/IMAS website to avoid any confusion."

Dr Money said:

Quote
There is no confusion. That web site is also the source of the data I used in my study.

I went through each of the 600+ funds at the LIA/IMAS web site and pulled out all the equity funds.

For ILPs, I took the average expense ratio for each insurer's equity funds. For unit trusts, I took one average for all equity unit trust funds.

Results:

1) For NTUC Income, the average expense ratio for its equity funds is 1.0 per cent.

2) For the other 10 life insurance companies, the average expense ratio for their equity funds is 1.7 per cent. (It ranges from 1.4 to 2.2 per cent.)

3) For unit trusts, the average expense ratio for all equity funds averages 2.1 per cent.

The results are shown in: http://www.askdrmoney.com/Ins_ILP_SP.htm
unquote

AA-rating: what is the difference?

I posted my views on a structured product that offers 4.9% return over 7 years. I received this comment:

Quote
This post seems to be selectively misleading. To my limited awareness, the assets backing the product concerned is rated by S&P. Have also done a quick surf of Income's website. It is revealed that Income is rated AA by S&P which is the same rating as the plan.

Since you have highlighted that it is a "scary" product due to the risk, will I be correct to say that it actually shares similar level of risk as Income?
Unquote

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Here is my reply:

It is very rare for an insurance company to fail. If it gets into financial difficulty, another insurance company will take over the liability. The policyholder will be protected to a large extend.

Anyway, NTUC Income is rated AA by Standard & Poors. This is the highly rating among all insurance companies in Asia. It is very safe to invest your money with NTUC Income.

In the case of the structured product (not offered by NTUC Income), the investor will lose 100% of the invested capital if there are 21 failures among the 121 investments.

Although the likelihood of 21 failures is small, it is still "scary", especially if the investor has not be made aware about this risk.

I advise the investors to clarify with the insurance company. You can decide after getting the explanation.

JetStar Asia

I went with a few colleagues to Phuket on JetStar. I wanted to experience a low cost airline.

My experience is satisfactory. It is almost like a normal airline. The only key difference is that they do not serve any food. I do not mind. Airline food is not that great anyway.

The saving is fare is almost 50%, compared to the normal airline. So, it make sense to travel on a low cost airline for short trips.

NTUC Income ILP Funds perform better than other funds

In the S&P website, the ILP funds of NTUC Income give a higher return than similar funds managed by other insurers. The difference is about 2 percent per annum.

Is it because NTUC Income fund managers were more skilled or perhaps more lucky? I do not think so.

The most likely reason is that our funds have lower costs. Dr Money has made an analysis of the cost. It is posted in his website, www.askdrmoney.com.

If you invest $100,000 for 10 years, what is the difference of 2% per annum in yield?

It is $34,000. This is the difference between earning 5% and 7% per annum. Yes, it is a lot of money. Yes, you can earn $34,000 more by investing with NTUC Income (and earn a 2% higher return), due to our lower charges.

Customer wants to buy an additional annuity

Dear Mr. Tan,

You gave a talk on Anniuty last year, I was in the audience. I was impressed by your frankness.

I wish to ask about your new feature, if I were to buy a new Annuity Policy, if I happen to die within a year or two, the unspent mobney will be return to the deceased family ?

I will probably have some money coming in Mid or end of Sept, and I am considering of buying another $30,000 worth of annuity.

Can you kindly e mail me a quotation, telling me how much in returns per month, I expect to receive in six month's time? I already have two existing annuity policies with your company and I am quite happy with them.

Logic9 pocketbooks sell very well

We now sell 2,000 pieces of the Logic9 pocketbook and CD software EVERY WEEK at bookstores, Fairprice supermakets and Income branches.

Logic9 is now getting to be very popular!

You can play the puzzle in the pocketbook when you travel by bus, train or plane. It sells for only $5 and contain 128 puzzles at 4 levels. Each puzzle has a unique answer, so it is fun!

You can buy a package of 4 volumes with a CD (to play on the computer) for a special price of only $16 from our branches. This is so popular, that it sold out. New stocks will arrive soon.

The Logic9 package is a wonderful gift for a friend.

Greetings for the 41st National Day

I wish to send greetings to our 1,800,000 policyholders.
Happy 41st National Day.

Tan Kin Lian
Chief Executive Officer
NTUC Income

You can lose your entire capital in this structured product!

An insurance company (not NTUC Income) sold a single premium product that pays an annual return of 4.9%. According to their advertisement, they will return 100% of the capital at the end of 7 years. There is a footnote that "terms and condition applies".

A financial expert who analysed this product told me that there is a risk that the investor may lose 100% of the capital invested, if 21 of the 120 investments failed.

Many of the investors may not be aware about this risk. If this event occur, they can lose their entire capital. If they invest $100,000, they may have to lose all of $100,000. Although the probably it low, it can be quite frightening.

Apparently, the agents who sold this product did not highlight this risk to the clients.

I advise investors who have bought this product to seek clarification from the insurance company.

FAQ: Life Annuity

1. What is a life annuity?

A life annuity allows you to invest a capital sum to earn an income payable for the rest of your lifetime.

If you put the capital sum in a bank, you can earn interest at 2% to 3% per annum. For example, a capital sum of $100,000 can earn for you $3,000 a year, or $250 a month.

If this capital sum is invested in a life annuity, you can earn a higher return, e.g. 5% to 6% per annum. For example, a capital sum of $100,000, you can earn for you, say $6,000 a year, or $500 a month. The actual amount depends on your age, gender and the type of annuity.

A life annuity can pay a better return to you, because your capital sum is distributed back to you based on your average life expectancy.

2. Who should invest in a life annuity?

It is advisable for all retired persons to invest in a life annuity. You should invest a capital sum that is sufficient to provide a guaranteed income that can meet your expenses during your retirement.

Most couples with a modest lifestyle will find $1,500 a month to be adequate for their needs, if they already owned a home that is fully paid. A single person will probably need $1,000 a month.

If they are used to a comfortable or luxurious lifestyle, they will need a higher monthly income. Some people target to have $5,000 or $10,000 a month for their needs.

3. How is the annuity better than other types of investments?

The life annuity has the following advantages compared to other types of investments, such as fixed deposits or investing in shares:

* it provides a better return than fixed deposit
* the payment is guaranteed for a lifetime

You can choose an annuity with the following features:

* pays back the balance of the capital on early death
* increases the monthly payment with a bonus each year

If you put your capital sum in fixed deposit and spend more than the interest earned each year, you capital sum will run out at a future date. You will have nothing to live on.

With a life annuity, this will never happen. The monthly income will continue to be paid to you for as long as your live. It will continue to grow with a bonus.

4. How much do I get from my capital sum?

The amount of monthly income depends on the following:

* your current age and gender
* the commencement date of the annuity payment
* the type of annuity

Here is an example of the monthly annuity for a capital sum of $100,000. The first payment is due one month after the date of entry. A bonus may be added to the monthly payment each year, depending on the average investment yield of the fund.

Entry  Gender       Monthly annuity
Age                 No-CP   With-CP     

55      Male         $549    $391
        Female       $521    $366  
60      Male         $587    $428
        Female       $556    $400
65      Male         $629    $473
        Female       $599    $443

No-CP: no capital protection, ie no refund on early death
With-CP: with capital protection, ie refund of balance of capita sum on early death

A female receives a lower monthly payment compared to a male, because they are expected to live longer.

An older person receives a higher monthly payment, because they have a shorter life expectancy.

An annuity without capital protection pays 35% to 40% more than an annuity with capital protection. The difference is quite high!

5. How does the bonus work?

Each year, the actuary works on the return on the investments of the fund. If thi s return exceed the interest rate that is used to calculate the annuity payment, the actuary decides on the amount of the excess investment return to be used to declare a bonus to be added to the annuity payment.

In deciding on the amount of the bonus, the actuary has to take many relevant factors into account. The actuary has to act impartially and fairly in recommending the rate of bonus. The rate or bonus may differ between different types and series of annuity contacts.

If the rate of bonus is 3% and the monthly payment is $1,000, the bonus will add $30 to the monthly payment. The bonus declared in each year is guaranteed and will be payable for all future years. The monthly payment can only increase with bonus. It can never be reduced.

In some years, if the investment return is low, the actuary may recommend that no bonus will be added for the year.

The recommendation of the actuary is subject to approval of the board of directors. The payment of the bonus is non-contractual and is not guaranteed. The decision of the board of directors is final.

NTUC Income is a cooperative society. The actuary and board of directors will act in the best interest of all annuitants in deciding on the amount of bonus to be declared. They will declare a good rate of bonus while ensuring that the annuity fund remains financially solvent for all future years.

6. Why is my capital consumed during my lifetime?

If you wish to keep your capital sum intact, you should keep your money in a bank and spend only the interest earned. However, the amount of interest may be quite low, and inadequate for your needs.

You invest in a life annuity to earn a higher return. This is achieved by consuming your capital sum over the average life expectancy.

Some annuitants die younger. They will leave behind the balance of their capital sum in the fund. This will be used to pay the monthly income to the annuitants who live longer. The annuity works on the principle of pooling of risk of life expectancy. This is a fair arrangement.

Under the capital protected annuity, the balance of the capital sum (after deducting the monthly payments) is refunded to the estate on the early death of the annuitant. Only the interest earned is left behind in the fund.

If the annuitant does not need to have the refund on early death, they will receive a larger monthly payment.

7. What happens if I die at a younger age?

It depends on whether you have any capital protection, and the type of protection that is available in your annuity policy.

In some of our earlier policies, the annuity payment will continue to be paid to the beneficiary for a certain number of years. The remaining payments can be discounted to a lump sum, using the prevailing rate of interest.

For the policies issued in recent years, the balance of the capital sum is refunded, after deducting the annuity payments that have been received! .

8. What happens if I live for a long time?

The monthly payments will continue to be paid to you for as long as you live. If you live longer, you will receive more than the invested capital sum and the interest that is earned. The extended payment is contributed by the annuitants who die younger and leave behind a part of their capital sum in the fund.

9. Can I invest with my CPF savings?

If you have withdrawn your CPF savings, you are free to invest the savings in any suitable way that you decide. It is better to seek the advice of an expert adviser.

The CPF requires all members to keep a certain amount of savings in the retirement account. This amount is currently $99,400. This savings can be invested in a life annuity, but is subject to certain rules imposed by the CPF. Under this rule, the monthly payment can only start from age 62.

NTUC Income has a special plan, called the Classic Annuity, that is approved by the CPF. This plan is very popular. Over 25,000 CPF members have opted to invest their retirement account in this plan.

10. Can I invest with my own cash?

You can invest your own cash, including the savings withdrawn from the CPF account at age 55, in our life annuity.

Most people choose an annuity policy that pays the monthly payment immediately! , and has a capital protection. A few annuitants prefer the non-protec ted policy, as it pays a higher monthly sum.

Some people choose to invest their savings in our Combined Fund to earn a higher rate of return (not guaranteed), and to convert a part of the savings into a life annuity when they are older, say after age 65.

11. What is the difference between a participating and a non-participating annuity?

A non-participating annuity pays a fixed monthly sum. It is not eligible for any bonus.

A participating annuity pays a lower monthly sum (compared to a non-participating annuity), but is eligible for an annual bonus, based on the rate dec! lared by the board of directors.

All life annuities offered by NTUC Income are participating contracts. We offer some short term annuities as non-participating contacts.

12. Can I cancel my life annuity to get a refund?

You are allowed to cancel the annuity contract within three months of purchase and get a refund of the capital sum with interest earned, subject to deduction of some charges and any payments made to you.

Under the Classic plan, you can allowed to cancel the annuity contract at any time before age 62 and get a refund based on the terms of the contract, i.e. a refund of the capital sum with interest earned, subject to deduction of some charges.

After the annuity payments has commenced, you are generally not allowed to cancel your annuity and get a refund. The annuity is intended to be a lifetime contract.

If you insist on cancelling the contract, we can pay the refund that is applicable in the event of early death. This refund is usually not attractive to the annuitant.

Under certain circumstances, we may pay a higher refund, but this is entirely at our discretion. We have to make sure that the request for cancellation is not an attempt to take unfair advantage of the fund.

13. Should I keep my capital sum to pass to my children?

You have other assets, including your property, that can be passed to your children. This is more than sufficient.

You should invest a certain capital sum in a life annuity for your own benefit. You have to take care of yourself. This capital sum does not need to be kept for your children.

Policyholder decided to keep the Growth policies

A policyholder invested in our Growth policies (ie single premium endowment policies).

She was approached to invest in a fixed deposit at a preferential rate of 3.45% for one year. She wanted to surrender the Growth policies to re-invest in this deposit. Based on the current surrender values, the yield for the past 4 years was about 2.5% per annum.

I sent to her the following facts. If she continued the Growth policies to the maturity date, the average return for the entire period increases to 3.5% per annum, based on our current bonus rates.

However, if we measure the cash value now now and the projected value at the maturity date, the return increased to an average of 5.2% per annum. It was clear that the policyhholder will get a better return by keeing the Growth policy to maturity.

She replied,

Dear Mr Tan

Thanks for dispensing good advice and information. I really do appreciate the efforts taken by you, and Jessie Wong.

Reply to Lim Yan Beng: It is better to invest in a life annuity!

Editor
Forum Page
Straits Times

I refer to the letter from Mr Lim Yan Beng entitled "It may not pay to invest in an annuity" (St Times, 8 August).

Mr Lim transferrred $37,000 from his CPF Retirement Account to pay a life annuity that pays him a guaranteed monthly sum of $183.30 in 2009, when he reach age 62. This monthly sum is payable for a lifetime and will earn an annual bonus that depends on the return from our investments.

The bonus that is added to his monthly sum is $4.60 in 2004 and $5.20 in 2005. They will increase his monthly sum to a total of $193.10 payable from age 62. This represents a notional return of 6.26% on his invested sum of $37,000. As a bonus is added each year, the notional return will increase further.

As each year's bonus is declared, it will be added to the monthly sum and is guaranteed.

In some years, if our investment return is low, we may not declare any bonus. But the bonus that were declared in past years are guaranteed. The monthly sum can only increase. It cannot be reduced.

The monthly sum will be payable for a lifetime. Many people are not aware that, with increased life expectancy, more and more people will be living beyond age 80, 85 or even 90 years. It is important that they invest a substantial portion of their savings in a life annuity that guarantees a payment to them that will continue for a lifetime.

For other types of investments, if the retiree draws out a large sum that the interest that is earned, there is the risk that the savings will be completely drawn down during their lifetime. This will leave them with nothing to live on.

The notional return quoted above is partly contributed by the consumption of the capital during the lifetime. The effective return to the annuitant is slightly more than 5% per annum, taking all relevant factors into account. This is more attractive than leaving the money to earn 4% per annum in the retirement account.

I apologise that my colleague had not given the information about our bonus in the right context to Mr Lim. This has led Mr Lim to make the wrong decision to cancel his life annuity. I urge Mr Lim to visit my office and talk to our specialist. I hope that he will reconsider his decision.

This incident highlights the importance of educating the public about the financial product that they have bought.

During the past two years, NTUC Income as intensified our effects to educate the public. We now have FAQ (frequently asked questions) about our various popular products. They are easily accessible from our website, http://www.income.coop/insurance/faq/

We also organise educational talks on various products. We invite our policyholders and potential customers to attend these educational talks. I urge them to attend the talk and have a better understanding of their product. They should also visit our business center and talk to our product specialist.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Crazy Horse Paris

Singapore has the Crazy Horse Paris cabaret. It is an interesting show. For those who have not experienced it, you should try it. It is at Clarke Quay.

Over the past 15 years, I visit the Crazy Horse show in Paris on two occasions. It was highly recommended. I enjoyed the show each time.

The show consists of several dance items. They featured girls dancing to music. The girls were scantily clad, but not totally nude. The show include colored lights shining on their bodies.

It is an erotic show, but is tastefully executed. Many ladies enjoyed the show.

In Paris, I paid about $200 to watch the show. The show in Singapore is almost of the same standard as in Paris and is available for less than $100. One can get the standard of Paris for half of the price.

NTUC Income has made a special arrangement for our policyholders to watch the show at a special discount of 20% (for 4 or more tickets). Call 6877 3366, if you are interested. This is for a limited period only.

Customer ask for advice about Writing A Will

A customer ask me to send a copy of my past article about "writing a will". I am not able to locate it. I asked the customer to go to:

www.knowyourinsurance.com.sg.

There is a topic on "writing a will".

I hope that it is helpful.

Immediate response service for motorists

Each day, an average of 40 motorists insured by NTUC Income meet with an accident.

For most cases, the motorist is able to drive their car to a nearby assessment center (Idac) to lodge a claim.

About 15% of motorists need assistance at the scene of the accident. They can call our hotline 6788 6616, to ask for our "immediate response service".

We will despatch a surveyor to visit the motorist at the scene. They will usually arrive at the scene within 30 minutes. However, if there is traffic congestion or heavy demand, they may take longer.

We are able to offer this service to third party claimants if our motorist is at fault in the accident.

At the scene, the surveyor will help the motorist to complete the SAS form (Singapore Accident Statement), take photographs of the accident scene and damages to the vehicles and guide the motorist to the nearest assessment center. If needed, they will also arrange for a tow truck.

For minor accidents, the surveyor is able to make direct settlement of the claim. This allows the motorist to find their own workshop to repair the vehicle. If their repair bill is lower, the motorist can keep the difference.

We now handle about 50 requests each month. We expect the number to increase, as there is greater awareness about this service.

Customers who use this service during the past six months have given us a high satisfaction rating of 90%. Some injured third parties equally commented our officers for prompt follow-up.

Dispute over liability in third party claim

A policyholder disagreed with our claim officer's assessment of liability in a claim from a third party. He felt that the claim officer had not made the correct assessement. This matter was reviewed by the claim manager. After several rounds, the policyholder was still not satisifed. He brought this matter to my attention. I gave this reply:

Dear

I have taken note of this case.

The assessment of liability has to be made by our claim officers using their expertise and judgement. They have to take the relevant facts into account. If you disagree, you can meet with the claims committee to present your facts for their review.

If you wish to refer the matter to FIDREC, we will let them handle the matter.

I believe that my colleagues have stated our position on this matter. I think that they have acted fairly. They will not be able to engage in a further debate with you on this matter. Please accept our position as final.

19 qualified agents want to migrate to NTUC Income

20 qualified agents from other insurance companies attended our recruitment briefing today. They responded to our advertisement, "Soar in your Insurance Sales".

After the briefing and question and answer session, 19 agents signed up to join us. The remaining agent is a Malaysian. He will join us, if we can help to get a work permit for him.

All of these agents are convinced that NTUC Income can offer them a better opportunity to succeed in their passion - to serve the needs of their customers.

We welcome them.

Flexi Cash earned 3.5%

Flexi Cash is invested in our money market fund. It should earn a return based on the average return of the fund, less a small charge of 0.25% per annum.

During the past month, from 1 to 31 July, the unit price of the money market fund increased from $1.032 to $1.035. This works out to an annualised return of 3.5%. It is higher than the 3% that was initially projected. (Please note that the higher return could be due to the rounding effect of computing the unit price).

The return on our money market fund will grow with the return on the money market fund.

Advice for a retiree on investing the savings

FROM A RETIRED PERSON

Hi Mr Tan,

About 1 1/2 years ago, I mentioned in passing to one of your staff that I am impressed by your personality. I told her that though I do not know you personally, the write-ups about what you do tell a lot about your person. My husband had spoken to you in person at one of your seminars and was pleasantly surprised that you were sincere and approachable.

Shortly after I received an email from your staff conveying your appreciation for the compliments, and it was followed by a simple 2-word yet personal "thank you" email from you. Each time when I clear my mail, I am reluctant to delete your thank you note as it represents a comforting affirmation that we do the right thing to buy from NTUC Income.

I wish you well and hope you have many more years of good health and is able to steer NTUC Income for a long time

Currently I am still unsure whether I should buy a growth or annuity policy or split the $90,000 (CPF ordinary account on attaining 55) and buy both policies. I have been in contact with your insurance personnel but would much appreciate your personal take as to what the best option is. Thank you.

MY REPLY

Dear

Thank you for much for your kind words.

For most retired people, my advice is to buy a life annuity, as it provides an attractive return and provides an income for a lifetime.

However, the actual right answer has to take into account, the other factors. For example, do you have other sources of savings and income? I will ask my adviser, XYZ, to contact and advice you. He has advised some other retired people who have invested large sums of money with us, partly in a life annuity and partly in our investment fund.

I believe that he can give good advice to help you to make the right decision.

Our projection are conservative!

A contributor to another web forum made tihs report on our Flexi-Cash plan: "NTUC Income usually has high non-guaranteed rates giving a false sense of security to consumers

I sent the following reply to that forum:

Flexi-Cash is invested in our money market fund. Currently, the fund earns an average return of about 3%, after deducting the management fee of 0.25%. As the market interest rate is likely to increase, the return on the money market fund is also likely to be higher. This is not a projection. It is a description of the working of the money market fund.

For our other insurance products, NTUC Income adopts a conservative projection of our future bonus rates. They are based on an average yield of 5.25% on our life insurance funds over the long term. This is much lower than the projection used by some insurance companies.

SMS to notify our policyholders about the repair to their cars

NTUC Income insures 200,000 vehicles. We received about 25 cases each day from our policyholder who is involved in an accident and make a claim under their motor policy.

Our policyholder is required to report the accident at an assessment center (Idac) and to leave their vehicle there. We arrange for a workshop to repair the vehicle. We carry out a post-repair inspection.

The whole process from reporting to completion of repair and collection of vehicle takes 5 to 7 days for most cases.

During this time, we notify our policyholder through SMS on the workshp that has been selected and the estimated completion date. We also notify them on progress of the repari.

Our policyholders welcome this initative. They are notifed about the status and are not interrupted by a telephone call.

In our weekly survey, our policyholders gave a high satisfaction rate of 98% to our handling of their repairs.